Comprehensive Strategic Cooperation

During President Xi Jinping’s recent visit to the Philippines, 29 agreements were signed on various sectors such as industry, education, trade, finance, agriculture, infrastructure, people-to-people exchanges, etc. MOUs on joint efforts to develop oil and gas, as well as the Belt and Road Initiative (BRI) are two instances. Since 2016, China has become the Philippines’ biggest trading partner, biggest export market, the biggest source of imports and the second largest source of tourists. Mutual investment between the two states has shot up. 

The Philippines is the 9thcountry in ASEAN to sign an MOU with China on the BRI. These agreements have strategic significance, considering the role of the Philippines as coordinator for China-ASEAN relations, facilitating regional integration. People-to-people exchanges are important for sharing of expertise, expanding job opportunities and strengthening cultural and historical links. Such ties could anchor China’s presence in Southeast Asia. China’s sustained presence could mean prolonged investment and more opportunities. It is yet to be determined if these opportunities would be skewed in favour of the Great Power. The risk of increasing indebtedness could evolve into a trap if it is not mitigated in a timely fashion by the Philippines.

Almost 50% of the 75 projects proposed by President Duterte are supposed to be funded by China. To date, only three ventures have received financial support. Chinese investment appears to be slow-paced. These projects are the foundation of Duterte’s ‘Build, Build, Build’ programme, which is part of his plan to energise the economy via job creation and poverty reduction. This initiative is supposed to address the infrastructure deficit and thus, improve infrastructure development in the country, being pledged the support of public spending of up to 6% of GDP until 2022. Improving infrastructure investment could generate jobs, attract more capital and boost the overall economy. Most importantly, President Duterte’s programme is in line with the regional and global objectives of the BRI and this connects Filipinos to China, Eurasia and Africa. Does this mean that migrant outflow channels would be more diversified, given the many more options that would be available?

The Philippines has a highly developed migration management system that serves as a credible and practical model for the other five sending states in ASEAN (Cambodia, Indonesia, Laos, Myanmar and Vietnam). One of the main shortcomings of its economy has been insufficient job creation for a very large, capable and young workforce. We know from research that more development leads to more migration. Could China’s engagement help the Philippines to significantly increase the number of jobs available and correspondingly, increase the employment rate of Filipinos? Alternatively, could it mean that the Philippine economy would be injected with further increases in remittances resulting from increased connectivity and abundant destination options? 

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